(Note: the European Payments Council () is not a European Union (EU) legislative body. More generally, the is not part of the EU institutional framework.)
The vast majority of European laws are adopted jointly by the European Parliament and the Council of the EU under the so-called ordinary legislative procedure. The Council of the EU is the EU institution where the Member States’ government representatives sit, i.e. the ministers of each EU Member State with responsibility for a given policy area.
On 16 December 2010, the European Commission, which has the right of initiative to propose laws for adoption by the EU legislator, published the proposal for an EU Regulation to effectively mandate deadlines for migration to the Single Euro Payments Area ().
In February 2012, the European co-legislators, i.e. the European Parliament and the Council of the EU, adopted the 'Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro’. This EU legislative act is also known as the Regulation. It defines 1 February 2014 as the deadline in the euro area for compliance with the core provisions of this Regulation. In non euro countries, the deadline will be 31 October 2016. Effectively, this means that as of these dates, existing national euro credit transfer and direct debit schemes will be replaced by Credit Transfer () and Direct Debit (SDD).
In May 2013, the Council of the stated that the provisions of the Regulation “have to be fully respected by all market participants” in the euro area. It also stressed that all payment orders not submitted in the format requested by this law after 1 February 2014 “may not be processed by all payment service providers in euro area member states, which otherwise would be sanctioned.” (Council Conclusions on SEPA, May 2013).
In October 2013, a European Central Bank (ECB) press release stated: “Payment orders that do not comply with the legal requirements as laid down in the Migration End-date Regulation will not be allowed to be processed by payment service providers after 1 February 2014.”
On 9 January 2014, the European Commission published a press release (see ‘related links’ below) which states, among other things: “The Commission has adopted a proposal to give an extra transition period of six months during which payments which differ from the format can still be accepted so as to minimise any possible risk of disruption to payments for consumers and businesses. The proposal does not change the formal deadline for migration of 1 February 2014.” In order for this additional transition period to become effective, this proposal introduced by the European Commission must be formally adopted by the EU co-legislators, i.e. the European Parliament and the Council of the EU. The European Commission press release of 9 January 2014 further states: “ (...) the Commission urges the co-legislators [the European Parliament and the Council of the EU] to rapidly take up and agree this proposal so as to ensure legal clarity for all stakeholders. The Commission also calls upon [EU] Member States to ensure that, should the proposal still be in process of adoption on 1 February 2014, banks and payment services providers will not be penalised for continuing to process legacy payments in parallel with payments. For this reason, the proposal, if adopted after 1 February 2014 by the Council and Parliament will have a retroactive effect as from 31 January 2014.”
Also on 9 January 2014, the ECB issued a press release (see ‘related links’ below) which states: “The Eurosystem takes note of the European Commission’s proposal to modify EU Regulation No. 260/2012 related to the Single Euro Payments Area (), introducing an additional transition period of six months. Strong and successful migration efforts have been carried out by stakeholders in the euro area. The most recent information from national communities suggests that the pace of migration is high and accelerating, and the vast majority of stakeholders will complete their migration on time. The Eurosystem therefore stresses that the migration end date of 1 February 2014 remains and urges all market participants to complete the transition of all credit transfer and direct debit transactions to the standards by this date.” The Eurosystem comprises the ECB and the national central banks of the EU Member States whose currency is the euro.
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